15 De-bunking myths about factory manufactured housing — Getting a mortgage In the past it has sometimes proved difficult to obtain mortgages and insurances on homes built in a non-traditional way. This was due in part to the relatively poor track record of past generations of nontraditional construction. Attitudes have changed somewhat as products have improved and certification systems put in place which can demonstrate quality and longevity. The Council of Mortgage Lenders (CML) says on its website: “While lenders have no intrinsic preference for any particular mode of construction, they do have one overriding requirement: that properties considered in relation to a mortgage must be capable of standing as security for a loan of up to 35 years.” Says the Council: “In practice, this means that the property must be saleable and maintain, or increase, its value over the term of a mortgage loan.” In relation to modern methods of construction, lenders have been concerned about the ability of some designs to meet this criterion in key respects: — Durability: achieve a design life of at least 60 years. — Whole life costs at a level comparable to traditional construction: particularly relevant for lenders to social housing providers. — Repairability: no undue repair costs, and ability to use a range of local repair services. — Adaptability: the property should, without difficulty, support the usual range of adaptations/ extensions such as a porch and conservatory. — Insurability: buildings insurance should be available on normal terms. The CML flags up a number of certifications systems including those from the British Board of Agrément (BBA), the BRE and BOPAS. In addition, following a rigorous technical assessment to ensure fit for purpose and a 60-year design life, the NHBC will provide a 10-year warranty for non-traditionally built homes. Given this is the leading new build warranty scheme in the UK, developments that have this warranty are unlikely to struggle for a mortgage, nor should an owner struggle to sell on, says the NHBC’s Head of Standards and Technical, Graham Perrior. The BBA’s assessments of building systems or MMC, for example, focus on the demands of UK building regulations and also pick up any nonstatutory requirements, such as those of the NHBC. There are Agrément Certificates for building systems which include steel and timber framed, structural insulated panel systems, insulated concrete formwork and composite structures. Meanwhile, the Buildoffsite Property Assurance Scheme (BOPAS) has been developed by Lloyd’s Register, Building Life Plans (BLP), The Royal Institution of Chartered Surveyors (RICS) and Buildoffsite, in consultation with the Council of Mortgage Lenders and the Building Societies Association. The scheme was developed following consultations with the main UK lenders to address their perceived risks in lending against non-traditional construction systems. BOPAS comprises a rigorous durability and maintenance assessment and process accreditation, supported by a webenabled database which gives access to details of assessed building systems, registered sites and individual properties which have been warranted under the scheme. The data base not only holds information relating to first sales after construction but will be accessible for the life of a property, allowing all subsequent sales to be similarly checked against the database (www.bopas. org). Terry Mundy, UK Business Development Manager, Lloyds Register EMEA, stated that the BOPAS process, supported by the insurance based 10-12 year warranty, was acknowledged by the principal lenders as mitigating their perceived risks associated with lending against non-traditional construction systems. And the transparency afforded by the BOPAS web-based data base provided valuers with the confidence to accurately value non-traditional properties listed on the data base and supported second hand values tracking the market mean. A number of those involved in factory-made housing say that finance has not been a issue. Mar City, a housebuilder specialising in modular offsite construction techniques, told us: “Mortgages are fine; people have moved in on a number of our sites and have building insurance and NHBC warranty. Our homes have sold well.” PRP Chairman Andy Von Bradsky, architect of the Oval Quarter in Lewisham,one of our case studies, said: “The new houses have been very well received by returning residents and on the open market. There have been no bad perceptions about offsite production as they are traditional in appearance.” Getting insurance A potential drawback of using modern methods of construction is the perception that insurers can be reluctant to offer cover, particularly for timber frame construction. However, the NHBC’s Graham Perrior, says, “There should not be a problem getting buildings and contents insurance with the proviso they are designed and built properly. Timber frame housing should present no more fire risk than masonry construction. Arguably, there could be more risk during construction in that the timber can be exposed, but significant work has been carried out over recent years to reduce this risk and once completed it is fully protected.” Extending the property A concern flagged up by some homeowners is whether homes built offsite with prefabricated methods provide the same degree of flexibility to extend as those built using traditional systems. Volumetric systems can be more difficult in terms of flexibility to extend, but panellised systems should be no more difficult than conventional construction, says Fusion Building Systems’ Business Development Manager Stewart Hackney
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